People keep talking about MS apparently having 60%-70% of the cloud market. Let’s see where that number comes from.
Page 216 in the final report. They count every sub of Game Pass Unlimited which tries out cloud gaming as a paid MAU, because xCloud Beta is included in that sub, which leads to some users giving it a try out of curiosity, or trying a game before they buy it. Those are all counted as paying users even if they’re just trying out the service because it’s there. In Amazon’s case, they do not count every Amazon Prime sub which has access to Luna games every month and uses Luna that way, nor do they count users streaming Ubisoft purchased games on Luna for some reason. Why are these counted differently? This all serves to inflate the MS market share. Seems to me Nvidia is actually the dominant leader right now in cloud gaming, going by reasonable counting of paid MAU’s.
While ABK’s addition to cloud MAU is currently zero, they theorize how the twitch shooter CoD will be very popular on cloud with speculative arguments, while completely ignoring the dismal failure of Fortnite on cloud.
It’s a nascent market. The market share of any company is going to jump around a lot with user counts and revenue this miniscule. If Sony jumped in tomorrow in a big way, they’d probably be #1 quickly. If Google stayed in, the market shares of everyone would be different.
Page 217 here, looks like they have decided MS will be the dominant leader no matter what.
“Whilst it is not possible to determine how many users xCloud would have as a standalone service, the evidence described above indicates that cloud gaming attracts users to XGPU and that a significant proportion ([]%) of users would be willing to pay extra for it, even though they already have access to offline play, which suggests for those customers, streaming and offline play are not substitutes, and these customers may be interested in cloud gaming as a standalone service (although we recognise that it is difficult to fully separate Microsoft’s ability to ‘upsell’ xCloud to Game Pass customers from Microsoft’s ability to compete for stand-alone xCloud customers). In any case our concern is about Microsoft’s future position based on our assessment of its strength, and its substantial number of users now indicates that it may continue to attract a large number of users as cloud gaming grows.”
They are certain about MS’ cloud strengths, and yet separately here they acknowledge that Google having obvious strengths for cloud counts for nothing:
“We consider that Google’s recent decision to shut down its own cloud gaming service, Stadia, shows that merely having some strengths relevant to cloud gaming is not enough to guarantee a platform’s success.”
And here, they admit they have no clue what the market will look like in the future. Except that they’re certain MS will dominate it.
“Cloud gaming is an early-stage and growing dynamic market, and there is considerable uncertainty as to how it will develop and what competing business models will emerge… We recognise that we cannot predict with any certainty how exactly the market might evolve absent the Merger (or if the Merger is allowed to proceed on the basis of the Microsoft Cloud Remedy). Neither, in our view, can the Parties or third parties.”
Cloud gaming is not a market with a big up-front cost which locks people in for years, like buying a phone, or a console. Anyone who offers a compelling service can do well, and users will be able to switch around at no financial cost just like they do with streaming video services.
Most importantly perhaps, the cloud companies supported this deal. You’d think that should matter, but apparently not